OREANDA-NEWS. In August 2014, freight volume was at 105.8 mln tonnes (down 1.5% or 1.7 mln tonnes year-on-year), while freight turnover (excluding empty runs) was at 174.2 bln tonne-kilometres (up 4.1% or 6.8 bln tonne-kilometres).

It is worth noting that despite the decline in freight volume, overall industrial production volume in Russia in 1H 2014 increased by 1.5% y-o-y (Federal State Statistics Service).

Coal. In August 2014, 26.3 mln tonnes of coal were transported (up 4.2% year-on-year), while freight turnover amounted to 71.7 bln tonne-kilometres (up 7.0% year-on-year).

This growth was attributed to several factors, primarily increased coal production, and to a lesser extent development of coal deposits, and continued international demand for coal, particularly in the Asia-Pacific region.

Growth in freight turnover for coal resulted from increasing transportation distance - as more freight is transported to the Far Eastern ports for onward shipment to Asia.

Coal prices in August 2014 were at USD 76.8 per tonne - a USD 0.5 increase compared to August 2013.

Oil and petroleum products. In August 2014, transport volumes for oil and petroleum products, excluding liquefied petroleum gas, were at 21.4 mln tonnes (up 15.6%), with freight turnover at 26.2 bln tonne-kilometres (up 3.4%).

Freight turnover for oil and petroleum products increased due to growth in domestic turnover from 11.8 mln tonnes in August 2013 to 12.7 mln tonnes in August 2014 (up 7%).

Oil production in Russia is demonstrating growth in 2014 (according to CDU TEK, this indicator increased by 0.7% during the first eight months of this year to 349.4 mln tonnes). Lukoil, Gazprom Neft, Bashneft, Tatneft, smaller companies and PSA operators all increased production. Russia's largest oil company - Rosneft - decreased production by 0.3% to 127.2 mln tonnes (Vedomosti reported).

Increased domestic oil refining was the main factor impacting rail transportation volumes for this freight. This is due to tax incentives for oil refining, currently unchanged Russian Railways tariffs (which are expected to increase in 2015) as well as the commissioning of new and modernised refining capacities in Siberia and the Urals regions.

The key driver for growth in petroleum products transportation was increased fuel oil transportation volumes.

Brent crude prices were at USD 103.2 per barrel, as prices continue to decline.

Liquefied petroleum gas. In August 2014, transport volumes were at 2.6 mln tonnes (up 17.8%), with freight turnover at 6.2 bln tonne-kilometres (up 19.6%).

Gas prices stood at €19.7 MW/h, down almost by a quarter against August 2013.

Construction materials. In August 2014, the total volume of construction materials freight was at 16.9 mln tonnes (down 17.2%), with freight turnover at 10.9 bln tonne-kilometres (up 5.6%). Delivery volumes decreased due to the completion of Sochi Olympic Games infrastructure construction projects in Sochi.

Ferrous metals. In August 2014, transportation of ferrous metals was at 6.2 mln tonnes (down 1.5%), with freight turnover at 9.6 bln tonne-kilometres (up 8.5%).

Steel prices stood at USD 542.5 per tonne, up by 0.9% year-on-year.

Iron Ore. In August 2014, transportation of iron ore amounted to 9.1 mln tonnes (down 4.1%) and freight turnover amounted to 7.6 bln tonne-kilometres (down 10.3%).

The price of iron ore stood at USD 87.9 per tonne, down 36.2% year-on-year.

Scrap. In August 2014, transport of scrap amounted to 1.7 mln tonnes (up 13.3%), freight turnover was at 1.5 bln tonne-kilometres (up 14.4%).

Non-ferrous metals, ores and concentrates. In August 2014, freight volumes for non-ferrous metals equalled 1.6 mln tonnes (down 29.2%), freight turnover was at 2.9 bln tonne-kilometres (down 8.9%). Copper prices were at USD 6,979 per tonne, down 2.3% year-on-year.

Grain. In August 2014, grain transportation was at 1.8 mln tonnes (up 20.0%), freight turnover was at 2.3 bln tonne-kilometres (up 13.4%). Grain prices in August 2014 were at USD 248.5 per tonne, up 5.3% year-on-year.

Fertilisers. In August 2014, fertiliser transportation volume was at 4.1 mln tonnes (up 2.5%), freight turnover was at 6.4 bln tonne-kilometres (up 2.4%). DAP was priced at USD 530 per tonne, up 20% up year-on-year.

Note: Data on freight prices was provided by Bloomberg

Rolling stock production in the "1520mm region"

In August 2014, CIS plants produced 4,800 units of rolling stock, which is 35% less than in August 2013. Russian plants produced 4,300 units of rolling stock, down 17% year-on-year. Ukrainian factories produced 300 units of rolling stock, 5.8 times less than in August 2013. Prices for gondolas, platforms, hoppers, and oil tank cars remain stable, ranging between USD 42,000 and USD 52,000 for a unit.

Gondolas. In August 2014, around 2,700 gondolas were produced, which is 19% less than in August 2013. Gondola prices were between USD 41,000 and USD 43,000 per unit.

Oil tank cars. In August 2014, about 400 oil tank cars were produced (34% less year-on-year). Oil car tank prices ranged between USD 44,000 and USD 46,000 per unit.

Hoppers. In August 2014, 1,100 hoppers were produced (up 22% year-on-year). Of this number, around 500 were mineral hoppers, around 500 were grain hoppers, and around 100 were cement wagons and others. Grain hopper prices ranged between USD 46,000 and USD 48,000 per unit, mineral hopper prices ranged between USD 45,000 and USD 48,000 per unit, and cement wagon prices were between USD 43,000 and USD 47,000 per unit.

Box cars. In August 2014, around 100 box cars were produced (almost 9 times less than in August 2013). Box car prices ranged between USD 50,000 and USD 54,000 per unit.

Platforms. In August 2014, around 200 fitting platforms were produced, 20 times less than in August 2013, and about 200 universal platforms (1.8 times less year-on-year). Prices for various platforms ranged between USD 43,000 and USD 47,000 per unit in August 2014.

Information on rolling stock production is taken from the Rolling Stock Market data service.

Russian railcar market

In August this year, gondola tariffs stood at RUB 400-500 (USD 11-USD 14) per day. In August Rouble-denominated spot rates for gondolas and specialized railcars have stabilized and demonstrated slight growth. At the same time, Dollar rates are expected to decrease due to the continued weakening of the Rouble.

Daily tariffs for leasing boxcars in August 2014 stood at USD 20-USD 33 (RUB 720-1,200). Daily tariffs on universal and container platforms remained at USD 21-23 (RUB 800) and USD 21 (RUB 750-770), respectively. Grain hopper tariffs stood at USD 21-23 (RUB 800) per day. Mineral and cement hopper tariffs stood at USD 21-23 (RUB 800). Daily tariffs on oil tank cars ranged between USD 14 (RUB 500) and USD 21 (RUB 800). Gas tank car tariffs remained flat at USD 36 per day.

Russia's rolling stock fleet

Brunswick Rail estimates that in August 2014 idle stock decreased to 226,000 units, around 18% of the total fleet. At the same time we estimate that actual surplus rolling stock in August 2014 amounted to about 105,000-110,000 units.

The average empty run ratio remains flat m-o-m and amounted to 71% in August 2014.